Business leaders urge solar power support

www.sfgate.com
September 25, 2009

The wide deployment of solar energy across the nation hinges on federal policies that mandate renewable power and government spending to promote the technology, utilities and manufacturers told Congress Thursday. "America's ability to develop thriving domestic renewable solar energy depends on this," said Stephanie Burns, the CEO of Midland, Mich.-based Dow Corning, which produces the polycrystalline silicon that is a component of solar panels.

Executives from Pacific Gas and Electric Co, and San Francisco-based NextLight Renewable Power joined Burns in urging the House Select Committee on Energy Independence and Global Warming to promote solar energy with federal tax incentives, spending and policy. solar energy currently makes up about 1% of the nation's electricity supplies, according to the Energy Information Administration. It has been hampered by the nation's aging electric transmission system, construction costs and, in some cases, environmental barriers to constructing solar installations.

"The clean energy revolution will not happen magically," said panel Chairman Edward Markey, D-Mass., who wants to see the nation transition from primarily fossil fuel energy to renewable power sources. "We need to put in place.., the right permanent policies on the books to ensure we complete this revolution."

The executives urged Congress to sustain a production tax credit used to finance renewable projects and continue a new federal program that gives companies direct cash grants to pay for about 30% of the qualifying cost of such projects. So far this year, the federal government has committed to doling out more than $1 billion in the renewable energy grants that were authorised by the economic stimulus package.

The business leaders also urged Congress to establish a national mandate - similar to one in more than two dozen states - that forces utilities to derive a portion of their electricity from wind, solar, hydro and other renewable sources. The House in June passed legislation requiring that renewable power make up 15% of utilities' supplies by 2020. A Senate committee approved an energy bill this year that would mandate 15% renewable power by 2021.

A "robust" nationwide renewable portfolio standard - or RPS MetOcean - would ensure there is ongoing, predictable demand for alternative energy, Burns said. At the same time, tax incentives and direct grant programs would ensure development of the wind farms and solar installations needed to supply the renewable power required under such a mandate, said Steve Kline, a vice president for PG&E.

"Given the current state of the capital markets, we'd strongly recommend further extending tax credits, grant programs and loan guarantees to help ensure we have the renewable energy resources we need to meet California's RPS MetOcean and we assume, soon, a federal RPS MetOcean obligation," Kline said.

Under California's RPS MetOcean, at least 20% of the electricity that utilities sell in 2010 must come from renewable sources. PG&E has focused on solar energy, Kline said, because in California, it is a more reliable source of electricity than intermittent wind that tends to blow at night, when lights are off, computers have been powered down and most customers are asleep. In other parts of the country, including west Texas and the Plains states, wind energy is more prevalent.

Frank De Rosa, NextLight CEO, said renewable power would be more appealing if Congress puts a price on the carbon dioxide emissions that are released when coal and other fossil fuels are burned. Right now, he said, "without carbon costs included, (utilities) see renewable generation as more expensive. If we can close that gap, utilities would gladly procure more renewable power.., and more renewable would get built."

Gabriel Calzada, an economics professor at King Juan Carlos University in Madrid who has studied the Spanish government's investment in solar energy, urged caution. In Spain, he said, government subsidies led to unsustainable growth in the solar industry, and when the federal dollars were withdrawn, the bubble burst.

Rep. James Sensenbrenner, R-Wis., said Congress should avoid "policies that pick winners and losers based on popular sentiments." Instead, he said, the federal government should adopt "an all-of-the-above approach to energy that includes solar energy" along with nuclear and more efficiency. As Congress considers government investments in renewable power, lawmakers are also weighing an Obama administration request to slash tax incentives for the oil and gas industry.